Card prices skyrocketing

[Hankphenom]

Originally Posted by Exhibitman

Pete, that was some barn-burner with Sterling last night. I had a sizable consignment and figured to break even or maybe make a bit when I sent it in; I was thrilled to nearly double my money. I've spent all day digging out more stuff to sell.

That's the good news: more stuff will be coming out.

[Exhibitman]

Originally Posted by Hankphenom

That's the good news: more stuff will be coming out.

Econ 101, right: the demand raises prices until owners decide to sell and the supply increases enough to achieve equilibrium.

Econ 102: the speculators then bail out, prices drop, and many people who jumped on the FOMO bandwagon are left holding their...cards.

Econ 103: eventually, they capitulate and get out for whatever they can. People who've waited out the run up now buy.

Econ 104: ten years later another bubble inflates.

You know you are getting older when you can recall three or four of these card price cycles. The bizarro world part of this latest one is that the boom is driven by boredom and is taking place despite the economy and the bust likely will result from a return to more normal economic activity.

[h2oya311]

Originally Posted by Exhibitman

Econ 101, right: the demand raises prices until owners decide to sell and the supply increases enough to achieve equilibrium.

Econ 102: the speculators then bail out, prices drop, and many people who jumped on the FOMO bandwagon are left holding their...cards.

Econ 103: eventually, they capitulate and get out for whatever they can. People who've waited out the run up now buy.

Econ 104: ten years later another bubble inflates.

You know you are getting older when you can recall three or four of these card price cycles. The bizarro world part of this latest one is that the boom is driven by boredom and is taking place despite the economy and the bust likely will result from a return to more normal economic activity.

+1 Adam! Nice post for 2 in the morning (3 your time?)

[rats60]

Originally Posted by Exhibitman

Econ 101, right: the demand raises prices until owners decide to sell and the supply increases enough to achieve equilibrium.

Econ 102: the speculators then bail out, prices drop, and many people who jumped on the FOMO bandwagon are left holding their...cards.

Econ 103: eventually, they capitulate and get out for whatever they can. People who've waited out the run up now buy.

Econ 104: ten years later another bubble inflates.

You know you are getting older when you can recall three or four of these card price cycles. The bizarro world part of this latest one is that the boom is driven by boredom and is taking place despite the economy and the bust likely will result from a return to more normal economic activity.

Why is this bizarro? The hobby originally took off during the second worst economic crisis in our country's history after the great depression? We had double digit unemployment, double digit inflation and double digit interest rates yet there were enough people with money to buy baseball cards that everything rose dramatically in price.

Now we have the government sending everyone 3200.00 and people are locked in their homes with little to spend it on. Why wouldn't you expect some of it to go into cards when the government gives out free money to people who don't need it? After the stock market crash last year, why shouldn't people diversify into this hobby which has a 40 year history of solid growth?

I agree with your 4 points, but what we don't know is how many of these new investors will leave when we have the correction. That will determine if the drop will be minor or prices will correct back to close to where they were a year ago.

[Kutcher55]

Meanwhile a 1952 Topps Mays PSA 2 sells for $5,951 on eBay yesterday. Another PSA 2 closing out in 12 hours already at $3,400.

[CharleyBrown]

Originally Posted by rats60

Why is this bizarro? The hobby originally took off during the second worst economic crisis in our country's history after the great depression? We had double digit unemployment, double digit inflation and double digit interest rates yet there were enough people with money to buy baseball cards that everything rose dramatically in price.

Now we have the government sending everyone 3200.00 and people are locked in their homes with little to spend it on. Why wouldn't you expect some of it to go into cards when the government gives out free money to people who don't need it? After the stock market crash last year, why shouldn't people diversify into this hobby which has a 40 year history of solid growth?

I agree with your 4 points, but what we don't know is how many of these new investors will leave when we have the correction. That will determine if the drop will be minor or prices will correct back to close to where they were a year ago.

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

[Directly]

I attended a small 40 dealer sports card Saturday. I know two gentlemen who were there had at least 150,000 in cash buying, one was usually on the phone for the buyer. They both left broke--Ha!

[bobbyw8469]

Originally Posted by Directly

I attended a small 40 dealer sports card Saturday. I know two gentlemen who were there had at least 150,000 in cash buying, one was usually on the phone for the buyer. They both left broke--Ha!

LOL!! Card rich, cash poor. After they flip the cards, they will have a lot more than $150k, guaranteed.

[packs]

The gap between museum dealer table prices and market prices is getting closer. Maybe some day soon there will be an actual deal at a show.

[Arazi4442]

Originally Posted by bobbyw8469

LOL!! Card rich, cash poor. After they flip the cards, they will have a lot more than $150k, guaranteed.

Never sold $150k worth of cards but don’t you owe income tax on sales like that?

[DanP]

Originally Posted by CharleyBrown

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

Shaun, you got that right! I never could understand how anyone could think that the stimulus checks have anything to do with the crazy prices we are seeing now. Cards that sold for $1k in Nov are going for $10k now (look at Brady's Bowman Chrome, Magic/Bird RC, etc.) I think this is 90% about people with money being bored and entering the market. Once that happened they and others see prices rising and don't want to miss out.

[jchcollins]

Originally Posted by DanP

Shaun, you got that right! I never could understand how anyone could think that the stimulus checks have anything to do with the crazy prices we are seeing now. Cards that sold for $1k in Nov are going for $10k now (look at Brady's Bowman Chrome, Magic/Bird RC, etc.) I think this is 90% about people with money being bored and entering the market. Once that happened they and others see prices rising and don't want to miss out.

Absolutely. Those people buying 6-figure cards aren't doing so because of any stimulus check. People have to realize that those playing at that level are an incredibly small slice of the pie on the whole, though.

[JohnnyKilroy]

Originally Posted by CharleyBrown

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

[packs]

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

[JohnnyKilroy]

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

I use this as another indicator that there’s still growth. I have similar experiences when I mention spending big money on cards... I get the weird look like “you spend 15K on a piece of cardboard??”. The everyday people may not want to invest in cards, but until the day comes where I mention baseball cards and they answer with “oh yeah, I’ve heard a lot of people doing that”.. I think there’s still time. We aren’t quite at the “Stock tips from the shoeshine boy” yet.

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

Then you aren't doing your job!

[egri]

Originally Posted by JohnnyKilroy

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

Also with interest rates being this low, debt is cheap. Not a whole lot of incentive to pay off loans early or keep money parked in bonds and savings accounts. Thus far, stocks, real estate and alternative investments (cards, crypto, etc) have been benefiting, but I think when interest rates rise again, we’ll see money get pulled out of here and prices start to recede. Maybe not to where they were before, but below these levels.

[Seven]

I think the part of the Hobby that sees a bit of the drop off is the lower end vintage. What I mean is your Graded A-3 Cards, will probably dip back a bit. I think your high end vintage won't necessarily rise but certainly maintain its value. Unless some sort of Major market correction happens.

As a side note I'm even more upset that the Jordan RC I have, turned out to be a fake. As I would've sold it off by now and made a healthy amount of money.